InterMune Earnings: A RETURN to Profitability

InterMune, Inc. (NASDAQ:ITMN) reversed to a profit in the second quarter, beating Wall Street estimates. InterMune is a biotech company, which is focused on developing and commercializing innovative therapies in pulmonology and hepatology.

Results: Reported a profit of $493,000 (one cent per diluted share) in the quarter. InterMune, Inc. had a net loss of $39.9 million or a loss 68 cents per share in the year-earlier quarter.

Revenue: Fell 11.2% to $5.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: InterMune, Inc. beat the mean analyst estimate of a loss of 18 cents per share. It fell short of the average revenue estimate of $36.4 million.

Quoting Management: Dan Welch, Chairman, Chief Executive Officer and President of InterMune said, “We are very pleased to have negotiated with the German authorities a strong price for Esbriet, the first orphan drug that has undergone pricing and reimbursement review under Germany’s new AMNOG law. The conclusion of this favorable pricing and reimbursement negotiation brings welcome clarity and confidence to German physicians regarding the reimbursement status of Esbriet.”

Key Stats:

The company’s profit in the latest quarter follows losses in the three previous quarters. The company reported a net loss of $46.6 million in the first quarter, a loss of $44.5 million in the fourth quarter of the last fiscal year and a loss of $38.2 million in the third of the last fiscal year.

The company topped expectations last quarter after falling short of forecasts in the first quarter with a loss of 74 cents versus a mean estimate of a loss of 71 cents per share.

Margins shrunk in the first quarter after expanding the quarter before. Gross margin slipped to 40%, a 6.2 percentage points decline from the year-earlier quarter. In the fourth quarter of the last fiscal year, the figure rose 3.7 percentage points from a year ago to 67.7%.

Over the last five quarters, revenue has fallen an average of 13.8% year-over-year. The biggest drop came in the fourth quarter of the last fiscal year, when revenue fell 96.8% from the year-earlier quarter.

Looking Forward: Analysts seem more negative about the company’s results for the next quarter than a month ago. The average estimate for the third quarter has moved from a loss of 71 cents a share to a loss of 76 cents over the last thirty days. For the fiscal year, the average estimate has moved from a loss of $2.99 a share to a loss of $2.50 over the last sixty days.